SANTA FE, N.M. (AP) With New Mexico cutting schools and health care services, lawmakers fumed Feb. 12 over a proposal to finance economic development projects benefiting corporations like the Hewlett-Packard Co.

A proposal to allocate $38 million for capital improvements passed the Senate but not before several members criticized the state’s budget priorities and job creation strategy of offering financial incentives to big companies to locate in New Mexico.

The measure includes $3 million for a Hewlett-Packard customer service support center in Rio Rancho and $2 million for a facility for Fidelity Investments, the nation’s largest mutual fund company. That’s on top of $10 million provided to those projects last year.

The state offered tax incentives, job training funds and capital project financing to attract Hewlett-Packard, which is to employ more than 1,300 workers by the end of 2012.

“This may be the best project in the world. But we are cutting teacher salaries, cutting early childhood programs, cutting janitors’ salaries, cutting disabled funding, cutting program after program and program,” said Sen. Eric Griego, D-Albuquerque.

Sen. John Sapien, D-Corrales, said the Fortune 500 company has delivered what it’s promised and hired 700 people so far.

“That’s 700 new hires at a time of economic crisis where nobody is hiring except Hewlett-Packard,” said Sapien.

The legislation will finance nearly two dozen projects. Most of them provide for the construction or renovation of government facilities, including $7 million to finish the first phase of upgrades at the New Mexico Behavioral Health Institute in Las Vegas and $2.5 million for a port of entry at Santa Teresa in southern New Mexico. The measure allocates $300,000 for replacement of state police cars.

Most of the financing comes from bonds backed by severance taxes on oil and natural gas production. Game and fish revenues would provide $3.5 million for improvements at a fish hatchery in Guadalupe County.

“The fish are getting more money than people are,” said Sen. Phil Griego, D-San Jose, who wanted more money for new state police cars.

The bill passed the Senate 27-15 and was sent to the House, which is expected to revise what projects will be financed.

In recent years, lawmakers have doled out hundreds of millions of dollars for capital improvements in their home districts. Not this year, however. There’s little bond financing available because of a slump in tax revenues and the Legislature is considering scrapping some previously approved projects to free up money to replenish the state’s cash reserves.

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